Ross Gittins: Asia and climate change

The first thing to realise about the rise of Asia is that our farmers are about to join our miners in the winners' circle. The second is that climate change and other environmental problems may greatly limit our farmers' ability to exploit this opportunity. The third is that what we see as a looming bonanza, the rest of the world sees as a global disaster.

According to the government's white paper on the Asian century (which, be warned, shares economists' heroic assumption that there are no physical limits to consumption of the world's natural resources), continuing population growth and rising living standards in Asia will cause global food production to grow 35 per cent by 2025, and 70 per cent by 2050.

So, a new age of growth and prosperity for Aussie farmers? Don't be too sure.

Rising affluence is expected to change the nature of Asia's food consumption, with greater demand for higher quality produce and protein-rich foods such as meat and dairy products. This will also increase the requirement for animal feed, such as grains. There'll also be demand for a wider range of processed foods and convenience foods, and for beverages, including wine.

Illustration: Kerrie Leishman

But environmental and other problems will prevent the Asians from producing much of the extra food they'll be demanding. Unlike in the past, Asia is likely to become a major importer of food. And, of course, any delay in increasing food production to meet the increasing demand will raise the prices being charged.

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You little beauty. ''Australia's diverse climate systems and quality of agricultural practices position us well to service strong demand for high-quality food in Asia,'' the white paper says. After all, Australia is one of the world's top four exporters of wheat, beef, dairy products, sheep, meat and wool.

''As a result, agriculture's share of the Australian economy is expected to rise over the decade to 2025,'' we're told, something that hasn't happened for many, many decades.

So, a new age of growth and prosperity for Aussie farmers? Don't be too sure. The environmental constraints the white paper expects to bedevil Asian farmers will also limit our farmers' ability to cash in on Asia's growing affluence.

Also published last week was a determinedly positive but franker assessment of our agricultural prospects, Farming Smarter, Not Harder, from the Centre for Policy Development.

It says ''winners of the food boom will be countries with less fossil fuel-intensive agriculture, more reliable production and access to healthy land and soils''. That's not a good description of us.

The first question is climate change - the problem so many Australians have been persuaded isn't one. Although other countries - including China - are doing more to combat climate change than the punters have been led to believe, we don't yet know how successful global efforts to limit its extent will be.

What we do know is we're already seeing the adverse effects - hurricane Sandy, for instance - and can expect to see a lot more, even if global co-operation is ultimately successful in drawing a line. At present we're focused on efforts to prevent further change; before long we'll need to focus on how we adapt to the change that's unavoidable.

This non-government report says climate change is projected to hit agricultural production harder in the developing world than the developed world - ''with the exception of Australia''.

''Rainfall is forecast to increase in the tropics and higher latitudes, and decrease in the semi-arid to arid mid-latitudes, as well as the interior of large continents,'' the report says. ''Droughts and floods are expected to become more severe and frequent. More intense rainfall is expected with longer dry periods between extremely wet seasons. The intensity of tropical cyclones is expected to increase.''

So, without action to reduce or manage climate risks, Australia's rural production could decline by 13 per cent to 19 per cent by 2050, it says.

And it's not just climate change. ''One of the biggest challenges for Australian agriculture is that our soils are low in nutrients and are particularly vulnerable to degradation … every year we continue to lose soil faster than it can be replaced.''

The productivity of broadacre farming used to grow by 2.2 per cent a year; since the early 1990s it's averaged just 0.4 per cent. Australian farmers use a lot of fertilisers and fuel, the cost of which is also likely to rise strongly. And that's not to mention problems with water.

Meanwhile, those who worry about how the world's poor will feed themselves - or about the political instability we know sharp rises in food prices can cause - don't share our hand-rubbing glee at the prospect of Asia's greatly increased demand for food.

Almost as bad as high food prices are highly volatile prices. The three world price spikes in the past five years each coincided with droughts and floods in major food supply regions. Extreme weather events are likely to become even more frequent. (The growing diversion of grain to produce biofuels is another contributor to higher food prices.)

After the food price spike in 2008, 80 million people were pushed into hunger. But the growing concern with ''food security'' is often a euphemism for resort to beggar-thy-neighbour policies: countries that could export their food surplus to other, more needy countries decide to hang on to it, just in case.

The Asians' attempts to continue their (perfectly understandable) pursuit of Western standards of living are likely to be a lot more problem-strewn than the authors of the white paper are willing to acknowledge.

94 comments

Ross Gittins has put his finger on a big problem. I can see a huge dispute erupting in future, as the irrigation lobby pushes with all its might to drain the rivers in order to increase crop production. If you think the Murray-Darling argument of the last couple of years has been bad, then you ain't seen nothin' yet.

What people need to get through their heads is that there are no jobs on a dead planet.

Commenter

Greg Platt

Location

Brunswick

Date and time

November 07, 2012, 8:41AM

We don't inherit the Earth from our parents, we borrow it from our children.We need to consider the future and current day pollies and farmers and business people still have too short a time frame when it comes to trying to make as much money as possible.

Commenter

Franky

Location

Sydney

Date and time

November 07, 2012, 9:04AM

@Greg Platt - mate, stop this garbage! During the worst drought in living memory the Murray-Darling system kept flowing. Irrigators don't want to "drain" the Murray-Darling. Nor would current laws and regulations allow them to do it. Australians like you need to stop this stupid bloody farmer bashing.

Commenter

Stop the rot

Date and time

November 07, 2012, 9:16AM

@Greg.......don't worry about the farms as there will not be too many around after Coal Seam Gas Mining stuffs up the water table. And do our state politicians care........No, they only look at the "now" & never the future. Maybe it time that this sort of long term planning is taken off the states & handed to the federal government.

Commenter

Bazza

Date and time

November 07, 2012, 9:16AM

Two things are put in a spotlight:

- More demand for food in Asia means higher domestic food prices.

- Selling agricultural land to foreigners is the worst form of stealing from future generation (not to mention threat to our sovereignity). Must be banned completely.

Commenter

dinkumnet

Location

dinkumnet.com

Date and time

November 07, 2012, 9:32AM

I don't see why we can't use desalination powered by solar to obtain water for irrigation.

Commenter

JamesM

Date and time

November 07, 2012, 9:32AM

Ross, your commentary is always so on the money! I studied a diploma in renewable energy in 2006 and we had two csiro scientist come in to talk about how the climate change scenario will evolve. It is spookily going just the way they stated. The basic standard of science 1 + 1=2 is slowly showing the climate deniers up to be witch doctors who think we should comunicate like them with two cans on a piece of string. They have the problem now of having to shout into the cans in a room on their own and about time.

Commenter

Mark

Location

oz

Date and time

November 07, 2012, 9:48AM

@JamesM. May be you can not use solar for desalination because:

- Solar setup costs in a region of $5 per watt-Solar panel during its lifetime will not produce enough power to offset carbon emissions spent on its manufacturing- It is a long distance to pump water from where oceans are to agricultural areas.

What I can not understand is why we would not let farmers to catch and store excessive flows during floods in their dams. Or why do not we build a really big reservoir to catch excessive flows and then feed water back into the river system in times of drought?

Commenter

dinkumnet

Location

dinkumnet

Date and time

November 07, 2012, 9:59AM

Build more dams and the water will be available to all. It's the cheapest way to catch and store water for our future. But the Greens don't like practical ideas and Labor needs to keep the Greens happy to stay in power, so in VIC, no new dam has been built since the 1980's. More dams, less climate change nonsense.

Commenter

moi

Date and time

November 07, 2012, 10:36AM

@dinkumnet. -Actually not true about the lifetime carbon emissions of solar photovoltaic cells. Yes, there are carbon emissions involved with their manufacture and installation but this is clearly outweighed by the savings over the normal useful lifetime under most situations (15+ lifespan, average to good daily levels of sunlight). But concentrated solar thermal power has even lower carbon emission levels and can also provide baseload power so is preferable. But it unfortunately has very high capital costs and is not a mature technology.-But you're right. Desalinated water would be far too expensive for agricultural use particularly since it would need to be piped long distances-Where would we put this huge reservoir of yours? It would need to be downstream to catch the most water and because most suitable upstream locations already have dams. But then it would be very shallow and the water would evaporate long before it was needed. Lake Eyre stores a fair bit of water but it doesn't stay there long enough to backfill river systems in subsequent years.